Syria Today.

Syria’s third microfinance bank, the Bab Rizq Jameel for Microfinance (BRJ), has been granted a licence to operate by the Central Bank of Syria.

Abdul Lateef Jameel Community Services Programmes, a Saudi Arabian company active in the area of microfinance, owns 49 percent of the venture. Two Syrian nationals, Khudr Mohammed Hussein and Mohammed Khudr Hussein own 6 percent of the new microfinance institution between them, with the remaining 45 percent to be sold through an IPO at a date yet to be specified.

In practice, BRJ has been informally active in Syria for more than a year. A statement from the institution said it has contributed to the creation of 1,413 jobs in the Tartous area where it is operating. It also said the Abdul Lateef Jameel Community Services Programmes created 41,000 jobs in Saudi Arabia and 8,323 jobs throughout the Middle East and North Africa region via other BRJ branches in 2009.

The country’s first dedicated microfinance bank, The First Microfinance Institution Syria, entered the local market in 2008. The micro-lender, backed by the Aga Khan Development Network, has distributed some 14,500 loans to date and operates branches in eight cities.

An estimated 260,000 to 420,000 households in Syria require access to microfinance for business purposes. Another one million households require credit for non-business purposes such as housing, education and medical care.

Meanwhile, the Ibdaa Small and Microfinance Bank is expected to launch its operations within two months after its bylaws are approved, the online business website The Syria Report reported on March 15. Unlike other microfinance institutions, the bank was established under a special presidential decree passed on February 23.

Ibdaa, which means creativity in Arabic, will operate as a fully fledged bank providing both conventional and Islamic services. It will offer lending to low-income clients and will also accept deposits and insure its loans with local insurance firms, in accordance with instructions issued by the Syrian Insurance Supervisory Commission.

Ibdaa will not distribute any dividends to its shareholders, but will retain its profits for capital increases. It will be exempt from all taxes and fees on its operations, income and profits, while its clients will be exempt from stamp duty and mortgage fees.